The Government Position on The Housing Crisis Solution Moves Toward The Free Market Center Line
May 17th, 2009
Since the Spring of 2008 there has been much hype and excessive false hope surrounding all of the government plans for the many distressed homeowners in trouble with a mortgage on a property. The verdict to date underscores that the programs put forth by the government have had limited success. This is a kind statement. The jury’s verdict has been quantified by a plethora of evidence that the majority of the government programs simply don’t work for the situations most homeowners face in today’s deflationary environment. The situation we face as a county once again comes back to the center line. The free markets must be saved and used as an efficient means of clearing out the problems. Take this recent article title and link as an example:
Administration Offers a Plan to Spur Short Sales
http://www.financial-planning.com/news/administratoin-offers-plans-spur-short-sales-2661934-1.html
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The administration has done a good job at addressing the severe problems that were facing the free markets since the day Lehman Brothers was allowed to fail. Now what you are seeing is that the financial side of our economy is no longer looking over the abyss. We are in a healing process. The fear that all companies are going to go out of business and the end of capitalism is abating. This is a slow and painful process. We are now at the point where the administration is clearly moving back to the free market center line. They are no longer concerned about the people that are in trouble with their homes. They are moving toward a focus of how to get rid of the problem, stabilize real estate, and get the economy back on solid ground. The free market with Real Estate Short Sales and Deed in Lieu is just another means of avoiding foreclosures. As the article indicates, why not provide an incentive for lenders to get rid of the problems. Who cares if we can’t save all the homeowners? If you read this article and follow the theme of my blog since the fourth quarter of 2008 you will see I told you this would happen. The government will save the free markets and you will be on your own with your mortgage problem. This is where we are heading as a country. As major financial risk dissipates greasing the private sectors palm with compensation is just another opportunity to get past the problem.
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It’s for the greater good of the people and our economy. Sympatric cries that were once massaged by the politicians will soon not be tolerated. The free market machine will crush the losers that got into trouble with real estate and a process of renewal will occur. If you’re the odd man out it will be no different than being left on the battle field. After all you signed up for the mortgage and you owe the money. Once the economy and the housing market yield definitive signs of protracted stabilization you are toast unless you have a credible solution of your own.Â
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Why is it guaranteed that this will happen? How do I know this is happening right now? We are in a process of deleveraging. Everyone has heard the news headlines of the excessive levels of private debt relative to GDP and the savings rate. Do you think that the consumers are just going to huddle up and save save save to pay the debt down before they start spending lavishly again? It sounds like the practical and responsible thing to do, but it’s not realistic.
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What is happening right now is a process of massive evaporation of debt. Regardless of what you have read or have heard in the news, debt is being extinguished at an alarming rate. Millions of dollars in debt is being forgiven with Short Sales. Credit cards, car loans, and all types of unsecured debt are being renegotiated and/or charged off. The lenders are taking what they can get. The excesses are being corrected at and alarming rate. The lenders are literally capitulating to obtain some form of recovery. How do I know this? Maybe you think I just read this somewhere and it sounded like a juicy story. No, we are seeing it everyday with our clients. Debt is disappearing in one form or another and the lenders are capitulating. Deflation has caused Goliath to fear David and the fear is real.
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This is great news for our economy. The process of renewal is solidly underway. The message for you is to get on board. If you sit there with a mortgage problem you can’t handle and do nothing to find your own viable solution you are going to get slaughtered. Take the Free Trial at www.thenegotiatedsolution.com and investigate the Short Sale Solution. This is your opportunity. Take it or face the eventual accountability of the free market for the debt you now owe your lenders.
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Blogging from the front line of the housing crisis.
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Since this blog - another article came out from Washington Post on this same subject. Good article stating lenders are now getting some incentives for some short sales. http://www.washingtonpost.com/wp-dyn/content/article/2009/05/22/AR2009052201480.html
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GHunter
